The value of Bournville leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the unexpired lease term is less than 80 years
Leasehold residencies in Bournville with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Regardless of whether you are a tenant or a landlord in Bournville,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bournville valuers.
16 months ago Alexander, came seriously near to the eighty-year mark with the lease on his studio flat in Bournville. Having purchased his home 18 years previously, the unexpired term was of no relevance. Luckily, he recognised he would soon be paying an inflated amount for a lease extension. Alexander extended the lease just under the wire in April. Alexander and the freeholder in the end agreed on an amount of £6,000 . If the lease had slid below eighty years, the figure would have gone up by at least £1,075.
Last Winter we were approach by Mr Milo Morgan , who took over the lease of a newly refurbished flat in Bournville in June 1995. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical homes in Bournville with a long lease were valued around £166,400. The mid-range amount of ground rent was £60 billed per annum. The lease expired in 2079. Considering the 54 years unexpired we calculated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 plus costs.
Dr Arthur Walker was assigned a lease of a one bedroom flat in Bournville in July 2001. We are asked if we could approximate the premium could be to prolong the lease by an additional years. Comparable properties in Bournville with an extended lease were in the region of £232,800. The average amount of ground rent was £45 collected per annum. The lease finished on 25 November 2090. Taking into account 65 years outstanding we approximated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus costs.